Aggregates shipments declined 9 percent, reflecting the impact of severe storms in April across many of the Company’s markets. Markets in California, Virginia and Maryland realized increased shipments due primarily to strength in infrastructure projects.

Selling, administrative and general (SAG) expenses were $7 million lower than the prior year.

Earnings from continuing operations were a loss of $7 million, or $0.05 per diluted share, compared to a loss of $23 million, or $0.18 per diluted share, in the prior year.

The current year’s loss includes a $0.12 per diluted share charge related to the Company’s tender offer and debt retirement in June;

The prior year’s loss includes a $0.21 per diluted share charge due to the settlement of a lawsuit in Illinois; and

Excluding these specific charges, earnings from continuing operations were $9 million, or $0.07 per diluted share, compared to $5 million, or $0.03 per diluted share in the prior year.

Commenting for the Company, Don James, Chairman and Chief Executive Officer, stated, “Business conditions remained challenging in the second quarter due to weaker than expected demand, as well as to April’s severe weather, flooding throughout the quarter in our river markets and a significant increase in diesel fuel costs. However, we are encouraged by the improved pricing in the second quarter in each of our segments. Cost control remains a priority – whether it’s lowering plant costs or reducing SAG expenses. In the second quarter, SAG costs decreased 9 percent from the prior year and our aggregates operations continued to enhance production efficiency. These trends in pricing and cost control are consistent with our expectations.”

Second Quarter Operating Results and Commentary

Aggregates segment earnings were $103 million versus $122 million in the prior year’s second quarter due to lower shipments. A number of Vulcan-served markets, most notably markets in the southeast and along the Mississippi River, experienced disruptions in construction activity due to flooding and unusually severe weather. However, aggregates shipments increased versus the prior year’s second quarter in California, Virginia, and Maryland due primarily to stronger demand from public infrastructure projects. More specifically, aggregates shipments in California were up more than 20 percent versus the prior year’s second quarter due to some large project work. The average sales price for aggregates increased 2.5 percent from the prior year due to improvements in many markets. The earnings effect of higher pricing offset the impact of a sharp increase in the unit cost of diesel fuel.

Asphalt mix segment earnings were $8 million in the second quarter versus $7 million in the prior year’s second quarter. Average sales price for asphalt mix increased approximately 8 percent, more than offsetting the earnings effect of higher liquid asphalt costs and leading to higher unit materials margin versus the prior year. Asphalt mix volume increased 3 percent from the prior year’s second quarter.

The Concrete segment reported a loss of $9 million versus a loss of $6 million in the prior year’s second quarter. Ready-mixed concrete average sales price increased 8 percent from the prior year’s second quarter leading to improved unit materials margin. However, the improved materials margin effect was more than offset by a 12 percent decline in volume. Cement segment earnings in the second quarter were a loss of $1 million, flat with the prior year.

SAG expenses in the second quarter were $7 million lower than the prior year’s level. This year-over-year decrease resulted from lower spending in most major categories, including the Company’s legacy IT replacement project.

Net interest expense in the second quarter was $71 million versus $44 million in the prior year due specifically to $26.5 million of charges incurred in connection with the tender offer and debt retirement completed in June. These charges are due primarily to the difference between the purchase price and par value of the senior unsecured notes purchased in the tender offer and the noncash write-off of previously deferred issuance costs related to the debt retired in June.

All results are unaudited.

Outlook Highlights and Commentary

Aggregates segment earnings are expected to increase in 2011 versus the prior year.

Second half aggregates volume is expected to be 2 to 6 percent greater than in the second half of 2010, due in part to large project work in California, Virginia and Georgia;

Full year aggregates pricing is anticipated to be 1 to 3 percent higher, reflecting continued improvement across many markets; and

Focus on production efficiency gains and cost control measures will continue.

Improved materials margin in asphalt mix should lead to growth in 2011 segment earnings.

Concrete segment earnings are expected to improve somewhat in 2011 due to better pricing.

The Cement segment is expected to report a modestly higher loss in 2011 than in 2010.

SAG costs in the second half of 2011 are anticipated to be lower than in the prior year’s second half with full year expenses of approximately $305 million versus $328 million in the prior year.

Planned 2011 capital spending of $100 million compares to the previous estimate of $125 million and the $86 million spent in 2010.

Highway construction activity in 2011 is supported by strong growth in contract awards in 2010 and early 2011 and increased stimulus spending in key Vulcan states that were slower to start work on stimulus funded projects.

Multi-family construction is increasing due to growth in population and households while single-family construction remains soft due to a weak job market and continuation of the problems that led to the downturn in the housing market; and

Nonresidential construction is expected to bottom in 2011.

Commenting on the Company’s outlook for the remainder of the year, Mr. James stated, “Trailing twelve month contract awards for highways in Vulcan-served states, including awards for federal, state and local projects, were up 5 percent in 2010. In 2011, contract awards for highways in our states, after growing modestly in the first quarter, declined in the second quarter due mainly to the uncertainty regarding reauthorization of the federal highway program. Anticipated large project work in certain key markets provides additional support for our outlook for growth in aggregates shipments in the second half of 2011.

“Private construction remains at low levels with indications of improvement in certain categories. In residential construction, single-family housing starts have shown few signs of breaking out of the flat-to-downward trend of recent months. Multi-family starts, on the other hand, have increased sharply since late last year. In Vulcan-served states, multi-family starts have increased 24 percent versus 4 percent in other states – evidence that favorable demographics can provide support for construction activity even with weak economic conditions. Overall, we now expect shipments into residential construction to approximate the prior year.

“While private nonresidential construction remains weak, the rate of decline in contract awards has slowed considerably. Trailing twelve month contract awards for the manufacturing sector have been strong since late last year while awards for the retail and office sectors have increased modestly in 2011. Contract awards for the institutional and government sectors have continued to decline in 2011. Overall, the start of a sustained recovery in nonresidential construction will be influenced by employment growth, capacity utilization, and business investment and lending activity.

“While we are maintaining our aggregates volume growth expectations of 2 to 6 percent for the second half of 2011, we are reducing our full year volume forecast to flat to down 2 percent. Because of uncertainty regarding reauthorization of the federal highway program and lingering softness in single-family residential and nonresidential construction, we anticipate that most of the approximately 4 million tons aggregates volume shortfall in the second quarter will not be recovered in the second half.

“We are seeing some indications of relative stability in demand that should benefit pricing for our products going forward. However, the earnings effect of the increase in aggregates pricing is expected to be offset by the energy-related cost pressures expected throughout the remainder of the year.

“In asphalt mix, the average sales price continues to improve leading to higher unit materials margin despite the higher cost of liquid asphalt. We expect this trend to continue throughout the remainder of 2011. Overall, we expect asphalt earnings to increase from the prior year, reflecting a modest increase in volume as well as improved unit materials margin.

“In concrete, volume is expected to decrease from the prior year due to continuing softness in private construction, particularly single-family construction. However, we expect the loss reported in 2010 to narrow somewhat due mostly to higher pricing as a result of relatively more stable demand.”

Conference Call

Vulcan will host a conference call at 10:00 a.m. CDT on August 3, 2011. Investors and other interested parties in the U.S. may access the teleconference live by calling 866.783.2138 approximately 10 minutes before the scheduled start. International participants can dial 857.350.1597. The access code is 39399653. A live webcast will be available via the Internet through Vulcan's home page at www.vulcanmaterials.com. The conference call will be recorded and available for replay approximately two hours after the call through August 10, 2011.

Vulcan Materials Company, a member of the S&P 500 Index, is the nation's largest producer of construction aggregates, a major producer of asphalt mix and concrete and a leading producer of cement in Florida.

Certain matters discussed in this release, including expectations regarding future performance, contain forward-looking statements that are subject to assumptions, risks and uncertainties that could cause actual results to differ materially from those projected. These assumptions, risks and uncertainties include, but are not limited to, those associated with general economic and business conditions; the timing and amount of federal, state and local funding for infrastructure; the lack of a multi-year federal highway funding bill with an automatic funding mechanism; the reluctance of state departments of transportation to undertake highway projects without a reliable method of federal funding; the impact of the global economic recession on our business and financial condition and access to capital markets; changes in the level of spending for private residential and nonresidential construction; the highly competitive nature of the construction materials industry; the impact of future regulatory or legislative actions; the outcome of pending legal proceedings; pricing of our products; weather and other natural phenomena; energy costs; costs of hydrocarbon-based raw materials; healthcare costs; the amount of long-term debt and interest expense incurred by the Company; changes in interest rates; the impact of our below investment grade debt rating on our cost of capital; volatility in pension plan asset values which may require cash contributions to the pension plans; the impact of environmental clean-up costs and other liabilities relating to previously divested businesses; the Company’s ability to secure and permit aggregates reserves in strategically located areas; the Company’s ability to manage and successfully integrate acquisitions; the potential impact of future legislation or regulations relating to climate change or greenhouse gas emissions or the definition of minerals; and other assumptions, risks and uncertainties detailed from time to time in the Company’s SEC reports, including the report on Form 10-K for the year. Forward-looking statements speak only as of the date hereof, and Vulcan assumes no obligation to publicly update such statements.

Table A

Vulcan Materials Company

and Subsidiary Companies

(Amounts and shares in thousands,

except per share data)

Three Months Ended

Six Months Ended

Consolidated Statements of Earnings

June 30

June 30

(Condensed and unaudited)

2011

2010

2011

2010

Net sales

$ 657,457

$ 692,758

$ 1,113,773

$ 1,157,293

Delivery revenues

44,514

43,394

75,398

72,122

Total revenues

701,971

736,152

1,189,171

1,229,415

Cost of goods sold

556,617

570,423

1,020,039

1,034,063

Delivery costs

44,514

43,394

75,398

72,122

Cost of revenues

601,131

613,817

1,095,437

1,106,185

Gross profit

100,840

122,335

93,734

123,230

Selling, administrative and general expenses

75,893

83,376

153,408

169,872

Gain on sale of property, plant & equipment

and businesses, net

2,919

1,362

3,373

49,734

Recovery (charge) from legal settlement

-

(40,000)

25,546

(40,000)

Other operating income (expense), net

(4,378)

889

(6,940)

1,347

Operating earnings (loss)

23,488

1,210

(37,695)

(35,561)

Other nonoperating income (expense), net

(20)

(1,233)

1,361

144

Interest expense, net

70,911

43,723

113,161

87,016

Loss from continuing operations

before income taxes

(47,443)

(43,746)

(149,495)

(122,433)

Benefit from income taxes

(40,341)

(21,231)

(77,771)

(55,444)

Loss from continuing operations

(7,102)

(22,515)

(71,724)

(66,989)

Earnings (loss) on discontinued operations, net of tax

(1,037)

(1,477)

8,852

4,250

Net loss

$ (8,139)

$ (23,992)

$ (62,872)

$ (62,739)

Basic earnings (loss) per share:

Continuing operations

$ (0.05)

$ (0.18)

$ (0.55)

$ (0.53)

Discontinued operations

(0.01)

(0.01)

0.06

0.04

Net loss per share

$ (0.06)

$ (0.19)

$ (0.49)

$ (0.49)

Diluted earnings (loss) per share:

Continuing operations

$ (0.05)

$ (0.18)

$ (0.55)

$ (0.53)

Discontinued operations

(0.01)

(0.01)

0.06

0.04

Net loss per share

$ (0.06)

$ (0.19)

$ (0.49)

$ (0.49)

Weighted-average common shares

outstanding:

Basic

129,446

128,168

129,263

127,452

Assuming dilution

129,446

128,168

129,263

127,452

Cash dividends declared per share

of common stock

$ 0.25

$ 0.25

$ 0.50

$ 0.50

Depreciation, depletion, accretion and

amortization

$ 92,137

$ 97,280

$ 182,723

$ 191,476

Effective tax rate from continuing operations

85.0%

48.5%

52.0%

45.3%

Table B

Vulcan Materials Company

and Subsidiary Companies

(Amounts in thousands, except per share data)

Consolidated Balance Sheets

June 30

December 31

June 30

(Condensed and unaudited)

2011

2010

2010

As Restated (a)

Assets

Cash and cash equivalents

$ 106,744

$ 47,541

$ 42,173

Restricted cash

109

547

3,746

Medium-term investments

-

-

3,910

Accounts and notes receivable:

Accounts and notes receivable, gross

397,423

325,303

398,613

Less: Allowance for doubtful accounts

(7,641)

(7,505)

(9,290)

Accounts and notes receivable, net

389,782

317,798

389,323

Inventories:

Finished products

259,109

254,840

246,956

Raw materials

26,300

22,222

23,114

Products in process

4,930

6,036

3,784

Operating supplies and other

38,926

36,747

37,486

Inventories

329,265

319,845

311,340

Current deferred income taxes

44,794

53,794

57,575

Prepaid expenses

21,659

19,374

33,972

Assets held for sale

-

13,207

14,864

Total current assets

892,353

772,106

856,903

Investments and long-term receivables

37,251

37,386

34,078

Property, plant & equipment:

Property, plant & equipment, cost

6,739,908

6,692,814

6,632,580

Less: Reserve for depr., depl. & amort.

(3,197,163)

(3,059,900)

(2,915,565)

Property, plant & equipment, net

3,542,745

3,632,914

3,717,015

Goodwill

3,097,016

3,097,016

3,096,300

Other intangible assets, net

694,509

691,693

681,059

Other noncurrent assets

121,736

106,776

101,610

Total assets

$ 8,385,610

$ 8,337,891

$ 8,486,965

Liabilities and Shareholders' Equity

Current maturities of long-term debt

$ 5,230

$ 5,246

$ 425,300

Short-term borrowings

100,000

285,500

320,000

Trade payables and accruals

153,729

102,315

168,269

Other current liabilities

162,001

172,495

160,151

Liabilities of assets held for sale

-

116

409

Total current liabilities

420,960

565,672

1,074,129

Long-term debt

2,785,843

2,427,516

2,001,180

Noncurrent deferred income taxes

762,406

849,448

843,408

Other noncurrent liabilities

535,136

530,275

538,929

Total liabilities

4,504,345

4,372,911

4,457,646

Shareholders' equity:

Common stock, $1 par value

129,224

128,570

128,270

Capital in excess of par value

2,534,562

2,500,886

2,477,672

Retained earnings

1,385,208

1,512,863

1,610,835

Accumulated other comprehensive loss

(167,729)

(177,339)

(187,458)

Shareholders' equity

3,881,265

3,964,980

4,029,319

Total liabilities and shareholders' equity

$ 8,385,610

$ 8,337,891

$ 8,486,965

(a)

The June 30, 2010 balance sheet reflects corrections of errors related to an understatement of deferred income tax liabilities.

Table C

Vulcan Materials Company

and Subsidiary Companies

(Amounts in thousands)

Six Months Ended

Consolidated Statements of Cash Flows

June 30

(Condensed and unaudited)

2011

2010

Operating Activities

Net loss

$ (62,872)

$ (62,739)

Adjustments to reconcile net loss to

net cash provided by operating activities:

Depreciation, depletion, accretion and amortization

182,723

191,476

Net gain on sale of property, plant & equipment and businesses

(15,657)

(58,527)

Contributions to pension plans

(1,995)

(21,075)

Share-based compensation

8,849

10,524

Deferred tax provision

(92,031)

(54,755)

Changes in assets and liabilities before initial

effects of business acquisitions and dispositions

(37,591)

2,585

Cost of debt purchase

19,153

-

Other, net

6,437

11,167

Net cash provided by operating activities

7,016

18,656

Investing Activities

Purchases of property, plant & equipment

(51,512)

(42,158)

Proceeds from sale of property, plant & equipment

6,717

3,224

Proceeds from sale of businesses, net of transaction costs

12,284

50,954

Decrease (increase) in restricted cash

437

(3,746)

Other, net

927

(283)

Net cash provided by (used for) investing activities

(31,147)

7,991

Financing Activities

Net short-term borrowings (payments)

(185,500)

83,488

Payment of current maturities and long-term debt

(737,739)

(75,188)

Proceeds from issuance of long-term debt

1,100,000

-

Debt issuance costs

(17,904)

-

Proceeds from issuance of common stock

4,936

35,314

Dividends paid

(64,570)

(63,600)

Proceeds from exercise of stock options

3,232

12,597

Cost of debt purchase

(19,153)

-

Other, net

32

650

Net cash provided by (used for) financing activities

83,334

(6,739)

Net increase in cash and cash equivalents

59,203

19,908

Cash and cash equivalents at beginning of year

47,541

22,265

Cash and cash equivalents at end of period

$ 106,744

$ 42,173

Table D

Segment Financial Data and Unit Shipments

(Amounts in thousands, except per unit data)

Three Months Ended

Six Months Ended

June 30

June 30

2011

2010

2011

2010

Total Revenues

Aggregates segment (a)

$ 478,440

$ 513,844

$ 810,031

$ 855,160

Intersegment sales

(39,525)

(42,389)

(69,297)

(74,447)

Net sales

438,915

471,455

740,734

780,713

Concrete segment (b)

98,185

105,023

180,419

187,979

Intersegment sales

-

(1)

-

(7)

Net sales

98,185

105,022

180,419

187,972

Asphalt mix segment

110,888

103,549

175,535

166,521

Intersegment sales

-

-

-

-

Net sales

110,888

103,549

175,535

166,521

Cement segment (c)

16,824

22,903

33,354

40,848

Intersegment sales

(7,355)

(10,171)

(16,269)

(18,761)

Net sales

9,469

12,732

17,085

22,087

Total

Net sales

657,457

692,758

1,113,773

1,157,293

Delivery revenues

44,514

43,394

75,398

72,122

Total revenues

$ 701,971

$ 736,152

$ 1,189,171

$ 1,229,415

Gross Profit

Aggregates

$ 102,872

$ 122,017

$ 113,616

$ 137,386

Concrete

(9,030)

(5,574)

(23,440)

(21,666)

Asphalt mix

8,319

7,250

8,126

8,316

Cement

(1,321)

(1,358)

(4,568)

(806)

Total gross profit

$ 100,840

$ 122,335

$ 93,734

$ 123,230

Depreciation, depletion, accretion and amortization

Aggregates

$ 71,144

$ 74,877

$ 141,215

$ 148,048

Concrete

13,195

13,418

26,233

26,442

Asphalt mix

1,948

2,327

3,924

4,477

Cement

4,728

5,193

9,049

9,573

Corporate and other unallocated

1,122

1,465

2,302

2,936

Total DDA&A

$ 92,137

$ 97,280

$ 182,723

$ 191,476

Unit Shipments

Aggregates customer tons

36,405

39,925

60,928

65,065

Internal tons (d)

2,825

3,144

4,966

5,434

Aggregates - tons

39,230

43,069

65,894

70,499

Ready-mixed concrete - cubic yards

1,009

1,145

1,868

2,028

Asphalt mix - tons

1,998

1,934

3,239

3,204

Cement customer tons

74

100

127

174

Internal tons (d)

96

144

219

243

Cement - tons

170

244

346

417

Average Unit Sales Price (including internal sales)

Aggregates (freight-adjusted) (e)

$ 10.36

$ 10.11

$ 10.35

$ 10.20

Ready-mixed concrete

$ 92.81

$ 86.08

$ 92.00

$ 86.57

Asphalt mix

$ 55.00

$ 51.13

$ 53.61

$ 50.49

Cement

$ 78.38

$ 76.64

$ 77.23

$ 80.25

(a) Includes crushed stone, sand and gravel, sand, other aggregates, as well as transportation and service revenues associated with the aggregates business.

(b) Includes ready-mixed concrete, concrete block, precast concrete, as well as building materials purchased for resale.

Free cash flow deducts purchases of property, plant & equipment from net cash provided by operating activities. This financial metric is used by the investment community as an indicator of the company's ability to incur and service debt. Generally Accepted Accounting Principles (GAAP) does not define "free cash flow." Thus, it should not be considered as an alternative to net cash provided by operating activities or any other liquidity measure defined by GAAP.

We present this metric for the convenience of investment professionals who use this metric in their analysis, and for shareholders who need to understand how we assess performance and monitor our cash and liquidity positions. We use free cash flow and other such measures to assess the operating performance of our various business units and the consolidated company. We do not use this metric as a measure to allocate resources.

Table F

Reconciliation of Non-GAAP Measures

EBITDA and Cash Earnings Reconciliations

(Amounts in thousands)

Three Months Ended

Six Months Ended

June 30

June 30

2011

2010

2011

2010

Reconciliation of Net Cash Provided by Operating Activities to EBITDA and Cash Earnings

Net cash (used for) provided by operating activities

$ (37,034)

$ 12,216

$ 7,016

$ 18,656

Changes in operating assets and liabilities before initial effects of business acquisitions and dispositions

105,964

43,960

37,591

(2,585)

Other net operating items using cash

15,068

17,112

75,244

112,666

(Earnings) loss on discontinued operations, net of tax

1,037

1,477

(8,852)

(4,250)

Benefit from income taxes

(40,341)

(21,231)

(77,771)

(55,444)

Interest expense, net

70,911

43,723

113,161

87,016

Less: Depreciation, depletion, accretion and amortization

(92,137)

(97,280)

(182,723)

(191,476)

EBIT

23,468

(23)

(36,334)

(35,417)

Plus: Depreciation, depletion, accretion and amortization

92,137

97,280

182,723

191,476

EBITDA

$ 115,605

$ 97,257

$ 146,389

$ 156,059

Less: Interest expense, net

(70,911)

(43,723)

(113,161)

(87,016)

Current taxes

(2,167)

(3,715)

(13,766)

(2,909)

Cash earnings

$ 42,527

$ 49,819

$ 19,462

$ 66,134

Reconciliation of Net Loss to EBITDA and Cash Earnings

Net loss

$ (8,139)

$ (23,992)

$ (62,872)

$ (62,739)

Benefit from income taxes

(40,341)

(21,231)

(77,771)

(55,444)

Interest expense, net

70,911

43,723

113,161

87,016

(Earnings) loss on discontinued operations, net of tax

1,037

1,477

(8,852)

(4,250)

EBIT

23,468

(23)

(36,334)

(35,417)

Plus: Depreciation, depletion, accretion and amortization

92,137

97,280

182,723

191,476

EBITDA

$ 115,605

$ 97,257

$ 146,389

$ 156,059

Less: Interest expense, net

(70,911)

(43,723)

(113,161)

(87,016)

Current taxes

(2,167)

(3,715)

(13,766)

(2,909)

Cash earnings

$ 42,527

$ 49,819

$ 19,462

$ 66,134

EBITDA Bridge

Three Months Ended

Six Months Ended

(Amounts in millions)

June 30

June 30

EBITDA

EBITDA

Continuing Operations - 2010 Actual

$ 97

$ 156

Increase / (Decrease) due to:

Legal settlement ($41 charge Q1, 2010; $25 recovery Q2, 2011)

41

67

Gain on Virginia divestiture

-

(39)

Aggregates:

Volumes

(23)

(27)

Selling prices

10

10

Costs and other items

(11)

(14)

Concrete

(3)

(2)

Asphalt mix

1

(1)

Cement

-

(4)

Selling, administrative and general expenses (a)

7

7

All other

(3)

(7)

Continuing Operations - 2011 Actual

$ 116

$ 146

(a) Net of donations

EBITDA is an acronym for Earnings Before Interest, Taxes, Depreciation and Amortization. Cash earnings adjusts EBITDA for net interest and current taxes. These financial metrics are often used by the investment community as indicators of a company’s ability to incur and service debt. Generally Accepted Accounting Principles (GAAP) does not define "EBITDA" and "cash earnings." Thus, they should not be considered as an alternative to net cash provided by operating activities, operating earnings or any other liquidity or performance measure defined by GAAP.

We present these metrics for the convenience of investment professionals who use such metrics in their analysis, and for shareholders who need to understand the metrics we use to assess performance and to monitor our cash and liquidity positions. We use EBITDA, cash earnings and other such measures to assess the operating performance of our various business units and the consolidated company. We do not use these metrics as a measure to allocate resources.